The Madness Of Queens Park Rangers’ Annual Accounts

Well, at least we now have a fuller picture of exactly why the club is understood to be so steadfastly against the notion of Financial Fair Play. It had been expected that the release of Queens Park Rangers’ annual accounts for their 2012/13 financial year would not make for particularly appetising reading for the club’s supporters, but to suggest that at least they weren’t even worse than had been expected surely carries a hint of disingenuity about it. Over the course of the club’s last season in the Premier League, the club contrived to find a way to lose £65m, a figure so huge that it almost carries a hint of the fantastical about it. Ascent to the Premier League is supposed to be a be all and end all from a financial perspective. Of this is the best that the club’s senior management could muster during supposed days of milk and honey, the idea what this year’s figures might look like when they’re released in around twelve months time hardly bears thinking about.

Set out in stark black and white, there is little suggest reasons for optimism for the club’s medium to long term future. As ever, a wage bill that span out of proportion to anything that might be considered sustainable was the biggest single culprit. Player wages made up no less than 128% of the club’s entire turnover during this period, and supporters are, of course, fully justified in asking the question of what the club actually got for its money. The answer to this question is, of course, bottom place in last year’s Premier League table and a promotion push back from the Championship that has started to look as if it might be in danger of derailing in recent weeks. The disconnect between the entitlement of players, the financial realpolitik of life at the foot of the Premier League and the hopes or expectations of supporters has never been more starkly illustrated than in these headline figures.

There is, of course, a tendency on the part of supporters to be reflexively defensive when such criticism of their club is forthcoming. They may look for crumbs of solace at the accumulated wealth of those that own their club, for example. This, however, overlooks the fact that billionaires do not ordinarily become billionaires by throwing their money onto a metaphorical bonfire of their own vanities. The club’s total debt was £177m as of last summer but, whilst it is true to say that a majority of that is owed to people associated with the club, to store up debt in this way can hardly be considered healthy. One day, either that money will have to be repaid, written off or converted into equity. In terms of financial health, these three options can only be considered a choice of the least bad rather than of the best.

What is always somewhat surprising about flicking through financial results of this nature is the dawning of realisation that perhaps there seldom appears to be any provision made at all for long-term thinking at so many football clubs, especially when we consider that in the case of this particular football club the businessmen who ultimately take responsibility for this club are such highly successful businessmen elsewhere. These accounts paint a picture of a football club that staked its stability and security on staying the Premier League at the end of last season when it had finished the season before one point above the relegation places and spent the entirety of last season doing worse than they had the year before.

If we’re being generous, we might consider the possibility that plump parachute payments and the prospect of a pot of gold at the end of a rainbow – even though the club lost around £90m during its last two years in the Premier League, an irony that may be lost on Tony Fernandes (and his business partners, Kamarudin Meranun and Ruben Gnanalinigam) and Lakshmi Mittal but certainly isn’t on us – might allow the club a chance of clawing back some of its debt, but even in order to do this the club would have to radically change its financial policies of the last two or three years or so. And whilst the club’s relegation from the Premier League at the end of last season has meant that it is excused the Football League’s Financial Fair Play regulations for this season, few believe that next year’s figures won’t at least as bad as this year’s have been. It is a dismal indictment on those running Queens Park Rangers Football Club that not only were their losses the worst reported of any English football club for the 2012/13 financial year, but also that only Manchester City and Chelsea have ever reported greater financial losses over the course of one year than those announced by QPR today.

It has, of course, been strongly rumoured that Queens Park Rangers are one of the clubs acting as prime movers behind a possible legal challenge to the Football League’s looming Financial Fair Play regulations. There is a coherent argument to be made against FFP rules, that without significant redistribution of the game’s wealth across the board these rules are only likely to perpetuate existing hegemonies within the game. These financial results, however, do not relate to that particular argument. For two years, Queens Park Rangers were in the Richest League In The World, beneficiaries of the financial imbalance that exists between the Premier League and the Football League, and they managed to find a way to throw £120m away over those two years.

And ultimately, regardless of how much money the owners of the club are worth and whether the losses incurred are now no more than good money that has been thrown after bad or not, the likelihood persists that the owners of the football club could just walk away from it any time they like, and that someone else would have to pick up the pieces of what they have left behind. If anything, the financial results posted by this club today represent a powerful argument in favour of the tighter regulation of football clubs who frequently act as if they have no understanding of the concept of financial responsibility whatsoever. We presume that this isn’t the case of the otherwise successful businessmen who run Queens Park Rangers, so why have they been acting this way in relation to this particular business? It’s a question that they should come under more pressure to answer.

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

From the BBC:
On the day Tony Fernandes bought Queens Park Rangers, he spoke of prudence and stability.

He would not bankroll the club, he said. QPR would be run with common sense, good judgment – a model of how to succeed in a world where the value of footballers had become “completely inflated.”

“Football needs to change,” he declared. “There are clubs out there who are spending money that if they were in a real business they could not afford. That inflates it for everybody. For the sake of football, proper business sense has to be made.”

I submit that this was all more or less intentional on the part of the new owners. Take over the football club, put it in debt to yourself, eventually seize assets (prime real estate) and write off debt. What are the owners left with? Land they can develop for tourism/leisure/residential use in the primest of prime markets. Loftus Rd? Warren Farm? The new stadium? That’s why they hired Beard to run things – he has experience with London property boondoggles. This is a huge swizz. Fernandes and Bhatia feign interest in football for PR reasons, that is all.

[…] 9 March ~ Queens Park Rangers released their annual accounts this week, revealing that they lost £65 million in the 2012-13 season when they were ultimately relegated from the Premier League. Players wages made up for 128 per cent of their entire turnover in that period, with the total debt standing at £177m as of last summer. While the majority of that is owed to people associated with the club, questions are still being asked about the long-term sustainability of the club as Financial Fair Play kicks in and their Championship promotion bid is been stumbling. Two Hundred Percent have looked at QPR’s future. […]